Make sure you’re up to date on the responsibilities that come with being an executor before you agree to take on the role.
In the 2018-2019 tax year, HM Revenue and Customs (HMRC) opened a staggering 5,537 Inheritance Tax (IHT) investigations. This represents a 3.4% increase in comparison to the previous 2017-2018 tax year. Staggeringly this equates to nearly a quarter (23%) of the 22,000 estates where Inheritance Tax is due. With such an incredibly high proportion of estates affected, it raises concerns about whether those responsible for paying Inheritance Tax are aware of the risks if they make mistakes.
There have been well-publicised cases of lay-Executors having to shell out thousands of pounds of their own money for mistakes they’ve made in the Estate Administration of their loved ones. One of the worst cases was in 2018, when a lay Executor was held personally liable for a £340,000 IHT bill. Read all about it here
This is an extreme case but employing the services of legal professionals to help you administer the estate can ensure the role is carried out correctly and minimise any personal risk to yourself.
The role of an Executor or Administrator: Risks and responsibilities
Personal Representatives (Executors if there’s a Will or Administrators if there’s no valid Will) are responsible for administering someone’s estate when they pass away. This includes handling all the paperwork and paying the correct amount of Inheritance Tax (IHT), as well as dealing with assets, paying debts, handling Income Tax and transferring the inheritance to beneficiaries.
The role of an Executor or Administrator is not to be taken lightly as they have a legal and financial duty to ensure everything is dealt with correctly and in a timely manner. Among other responsibilities, they’re personally liable for the correct distribution of an estate, responsible for maximising the estate for the beneficiaries, and accountable if there are any errors on the Inheritance Tax return.
Many people are unaware of the risks and responsibilities that come with the role. It’s easy to walk in to such responsibilities when asked if you can be named as an Executor by a loved one, spouse or sibling, where the typical response is “of course, no problem”.
So if you have taken on such a role, what can you do about it. Well, you have the right to stand down, in which case others named as Executors can take on the role or you can appoint a professional Executor.
In the Wills we write, we insist that a professional Executor is named in one of three capacities. as the sole Executor, as the joint Executor working with other named Executors, or as a reserve Executor, to be called in only when the named Executors are unable to act.
The professional organisation we work with are Premier Solicitors and you can read about their services here
We believe that Executors and Administrators need to be more aware of their responsibility when it comes to administering an estate. Estate administration can be extremely complex so we advise putting the estate in the hands of experts, preferably someone who will take the legal and financial burden off your shoulders.
Premier Solicitors are one of the UK’s leading estate administration providers and take care of the complicated practicalities after death, so you can focus on life’s important moments.
Before you agree to being an Executor find out what’s REALLY involved. Request our report “The Role of An Executor by clicking here